Yesterday’s mortgage settlement aims to avoid the pitfalls of the administration’s floundering foreclosure program, but enforcement is again a question.

President Barack Obama, joined by federal and state officials, speaks about the details of a $25 billion housing settlement between federal and state officials and mortgage lenders on Feb. 9, 2012. (Kevin Dietsch-Pool/Getty Images)

Yesterday, administration officials stood alongside state attorneys general to announce a $25 billion mortgage settlement. It was reminiscent of a big announcement by administration officials three Februarys ago involving an even bigger number: $50 billion. That money was supposed to go to the administration's signature mortgage modification program, which eventually became HAMP.

Three years later, HAMP (the Home Affordable Modification Program) is widely considered a failure. That failure provides key context to yesterday's announcement.

According to the state attorneys general and the administration, a major selling point of the new settlement is that it won't repeat HAMP's mistakes. This deal, they say, is different.

"If people are eligible for a loan modification, the banks won't screw up those decisions anymore," said Iowa Attorney General Tom Miller.

North Carolina Attorney General Roy Cooper made a rather pointed reference to HAMP: "I think strong, court-ordered enforcement with teeth distinguish this deal from those earlier efforts to help homeowners."

When HAMP was launched, it came with the promise that mortgage servicers would have to abide by clear rules. The handbook laying out these rules now approaches 200 pages. But as we've detailed, enforcement of those rules has been lacking.

According to the state attorneys general, the settlement directly addresses that. The five big servicers — Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial (formerly GMAC) — that will sign on to the not-quite-finalized deal have agreed to follow a raft of new rules. Some of these rules, like how quickly a bank must respond to a homeowner's completed modification application, come straight from HAMP.

What's different this time, they say, is that there are clear consequences for rule-breaking. But plenty of questions remain, and only time will tell if the latest promises of mortgage-servicer accountability will be kept.

"The big picture is that these new rules are only good if servicers follow them," said Alys Cohen of the National Consumer Law Center. "Enforcement will really matter."

As critics like Firedoglake blogger David Dayen have pointed out, the new system relies to some extent on "self-assessments" by the banks to identify violations of the new rules. But Miller, the Iowa attorney general, notes that consumers will be able to complain to their state's attorney general, who will make sure their complaints are heard.

The settlement does create a "monitor" who will have the power to impose penalties. The administration says a bank could be fined up to $1 million per violation and up to $5 million for repeat violations. But the details released so far don't show how violations will be applied or counted. (If thousands of homeowners, for instance, have been wrongly denied modifications, will that be counted as one violation or thousands?)

HAMP came with no penalties for participating mortgage servicers that broke the rules. It was only in the past several months that the Treasury Department decided to address servicer noncompliance — by temporarily withholding the program's subsidy payments. (As for the millions of dollars in incentives that Bank of America, JPMorgan Chase and the other servicers were paid over the previous years, they get to keep that.)

The settlement is not only supposed to have more sticks than HAMP, it's also a chance for the administration to breathe life back into the old program. Treasury recently made major revisions to HAMP to allow more homeowners to qualify for modifications.

"The extension and expansion of HAMP are designed to be complementary to the settlement," said Treasury spokeswoman Andrea Risotto.

For instance, the program was set to end at the end of 2012 but now will accept new homeowners until the end of 2013. (The banks will operate under the umbrella of the settlement through 2014 or so.) In addition, Treasury has broadened some of the criteria to make it easier to qualify.

Some of the millions of homeowners who were rejected might be eligible for a second shot. Hundreds of thousands of homeowners were originally granted "trial modifications" through the program in 2009 and early 2010, only to be denied permanent modifications many months (and sometimes more than a year) later. Most of those homeowners started those trials by just giving their income information over the phone. They'll be eligible to reapply, according to the proposed rules.

One of the recent changes to HAMP could reduce the cost of the settlement for banks — and leave taxpayers footing a chunk of the bill.

As part of yesterday's deal, the five banks agreed to reduce billions in mortgage debt for homeowners in danger of foreclosure. Most of those principal reductions — about 85 percent according to Housing and Urban Development Secretary Shaun Donovan — will likely be for loans that the banks hold on their own books.

HAMP also has long offered investors incentives to encourage principal reductions. For loans owned by banks, the money goes right to them. In January, Treasury tripled those incentives. In cases in which a loan qualifies for HAMP, the government will now pay investors, often the banks themselves, up to roughly two-thirds the cost of a principal reduction.

The banks have agreed to perform at least $10 billion worth of principal reductions as part of the settlement. Because it's unclear how many of the principal reduction modifications will be done through HAMP, it's impossible to say how much of that will be covered by the government subsidies. (Update: On February 22, 2012, HUD published a blog post denying that HAMP subsidies could be used by banks to reduce the cost of the settlement. Servicers will “only receive credit for the portion of the principal reduction that they themselves pay for, not for the portion covered by incentives in the program,” HUD said. The terms of the settlement have yet to be publicly released.)

So far, about 40,000 HAMP modifications have been done through HAMP's principal reduction program at a median reduction of $67,196, meaning that roughly $2.7 billion in principal has been reduced. If the banks find HAMP more attractive because of the increased incentives, that amount might increase sharply, and HAMP could experience something of a renaissance.

68 comments

I had problems paying my mortgage because I lost my job two years ago. I tried getting a loan modification through Wells Fargo to be turned down many times. All I wanted was a reduction in interest from 7.5% to a more current amount. With a lower interest rate my monthly mortgage payment would have dropped significantly and that would have helped me through the bout of unemployment. But instead Wells Fargo wanted my home with an equity of 20 years so I filed for bankruptcy. Where does this new program leave me and so many other home owners who lost their jobs?

The only ones who can really fix this are the banks and mortgage companies who created these fraudulent mortgages in the first place. They have stolen all of the money that can repair the problem. Refunding all that stolen money is the solution.

If this settlement depends upon self-reporting by the lenders, or self-regulation by servicers, the plunder will accelerate. The US housing industry becomes an empty husk, like the other industries Wall Street and financial systems have performed the vampire act upon.

Thanks, Paul K. of propublica, for many, many excellent stories that have clearly illuminated the f.c. crisis as so many of us have lived it.
Here’s a Valentine for you - the praise and appreciation of the readers of this site. And the less-informed journalists who have learned from you.
MSM coverage of the “settlement” has been astoundingly poorly-researched. It’s horrifying, the myths that have been repeated.
Grateful to have you on the case, on our behalf.

After reading the details, as many as are available at this time, it’s obvious the administration wished to accommodate the bankers in running out the clock, and issuing an election year victory that is hollow, and fundamentally cynical.

However the ballyhoo and accompanying PR campaign is pitch perfect in targeted pronouncements - in California, AG Kamala Harris is being hailed as the ‘hard-nosed’ regulator who single handedly made the banks pony up/ when in fact, the soft money contributions are actually mortgagees’ equity that this comes from.
The banks and their servicing frontmen keep all the money extorted from the taxpayers under threat of economic chaos, and the contributions flood into Obama’s campaign. #epicsellout

Will those of us who REALLY got hurt in the foreclosure mess—those of us whose foreclosure process sped along within mere months in 2007-2008 before Obama got into office—be remembered in this settlement?

We were hurt much more than the people who have now been comfortably idling away time in their homes for four years without having to make a single mortgage payment while their files languish in the now-slow foreclosure process….yet they are the loudest whiners. They’ve had plenty of time to save up money for when the time finally comes to leave their house.

Whereas I was really and truly fraudulently foreclosed on. My mortgage loan was in the process of being resold/transferred to a new mortgagor in late spring 2007 without me knowing who would carry the loan, where to send my loan payments, and within two and a half months they were filing foreclosure on me, which is in direct violation of RESPA laws.

My paperwork on file with the Florida State Attorney’s Office notates many other forms of fraud perpetuated against me, including: changing the terms of the loan after I had signed the paperwork; no postage meters on legal/court docs sent to me by the foreclosure mill attorney’s office; MERS involvement; falsified assignment of mortgage with robosigning; and a falsified, inside-job Warranty Deed drawn up by the foreclosure mill attorney’s inhouse title company to “buy” my home at an “auction” that never happened.

My home was literally stolen from me illegally, plain and simple. I did not do any of things we homeowners are accused of. I qualified for my loan, I could afford it, and my home was accurately appraised.

A lot of people who went through foreclosure in 2007-2008 can say the same thing. We were hurt more than those who’ve been struggling since Pres Obama got into office, since at least his HAMP program, though it hasn’t been stellar, has slowed the process down for millions, giving them a chance to save money.

Had it not been for a spare room in my mother’s home for me to live in, I would’ve been homeless. I have had many financial struggles in an effort to recover. Here we are four years later, and I still do not have the standard of living I once had. People like me are owed, fair and square.

Just watch, it will be a year until they select a bureaucrat to decide who gets what. Then we continue the political football game while
using our tax dollars for a band-aid solution. One of these days we
will come to the conclusion that they are not too big to fail. Then EVERYONE will have to bite the bullet…no exceptions. In the meantime, just sit back and watch the spin, spin, spin! And I do
apologize for all the metaphors.

For a blog that is dedicated to transparency and honesty, its silence on an important aspect of the foreclosure issue has been curious. There is a lot of talk about illegal banking practices by those who push for “action”, but when a the policy actually comes along, people being “underwater” seems to be the primary focus, instead victims of fraudulent practices. Isn’t this a political bait and switch?

And there is another place where there seems to be deliberate confusion on the issue. People who are “underwater” aren’t necessarily the same people who “can’t afford their homes”. All being “underwater” means is that you, at least at the moment, haven’t made profit on the value of your home. It doesn’t mean the payment you were making has gotten larger. If you can’t afford your payment, it must because you lost income. People who have lost their jobs could need help, but such a program would focused on those who have lost their jobs.

In the end, it seems to be about bailing out people who failed to make money on the housing bubble. And of course, in the end, this money has to come from those who didn’t’ participate in the housing bubble. But I thought we were suppose to _reward_ responsible behavior.

Just so you know, my politics are to the right. However, I do believe there is enough blame to include ALL involved…even those who sit
back and do nothing. And what worse, there are those that see this
mess as a distraction so as to take advantage of the system
illegally and unethically.

Nice, and one more reason to say FU to the banks. Summary: They settled but the fine pales in comparison to the trillions they stole from the economy and us and taxpayers will ultimately foot the bill. How does that happen? The banks screw us in the beginning by jacking up hose prices and giving us unrealistic loans, screw us twice by taking our money and not giving out timely modifications, screw us thrice by illegally foreclosing on our homes and then they finally rape us by making us pay for the abuse. If an ordinary American did this we would be sentenced to death.

Wasn’t the California Attorney Ganeral holding out because she wanted to preserve the right of the individual to sue the bank? I’ve heard nothing in the media about this! Oh, well, a half loaf is better
than none?

This lousy $2,000 does nothing to help the innocent people who were thrown out of their homes through illegal robo-foreclosure.

They should be allowed to get back into their homes, unless they have made other arrangements, and should be compensated for moving expenses and necessary cleaning/refurbishing of abandoned properties.

To all of us who have lost our homes due to Wrongful Foreclosure this “settlement” is a HUGE INSULT. The Fraudulent, uncaring and brazen conduct by banks toward Homeowners who lost income due to the downward economy (caused by the banks) who just needed help to pay their mortgage will receive a $2,000.00 check (taxable?) by these “caring” banks, for what? Not so they are getting away with fraud or any crimes no, not that. Why is IndyMac/One West Bank not included in this “settlement”? I wonder? This “settlement” is a joke. Do these people really think we Americans are that ignorant? From our experience we cannot trust the banks anymore because to them it is the bottom line and not about people anymore except for their own greed.

The main problem with resolving the mortgage and housing crisis has emerged as flat-out ignorance and indifference even on the part of the Washington Post which referred to Robo-signing as a “victimless” crime.
This ignorance stems from a rancid combination of laziness and persistent ideology that disregards both known facts and the need to ascertain “unknown facts.”
The conclusion reached by most people is that the banks were wrong in submitting false documents with false declarations of fact and then forging them with unauthorised signatures and then notarizing false signatures — but that doesn’t mean that a borrower should not be foreclosed. This feels like explaining high finance and legal doctrine to a three-year old — except the people receiving the explanation should know better and in fact do know better.
No property transaction can be accepted based upon falsified, forged, fraudulent documents — so it does mean that there cannot be a foreclosure unless true documents reciting true facts are used in a foreclosure. The community bank on the corner has nothing to fear from the fact that they must show ownership of the loan and be able to provide a full and complete accounting on the loan. They never had a problem.
The assumption behind the Washington Posts reckless characterisation of these victimless crimes is that when you boil these “securitized loans” down, they are really no different than the community bank loan, that the documents will be real, and that the accounting for the loan will be full and complete.
That assumption is plainly wrong. And the corollary assumption that the banks were just “cutting corners” is equally wrong. The failure to investigate what the banks are hiding is an egregious failure of responsibility for both the press and law enforcement.
We can all agree that a person who borrows money should pay it back. We should also agree that such a person should be obligated to pay it back once, not multiple times. And we should also agree that the lender should only be paid once, not multiple times. Because so many people wish to gloss over the niceties of proper documentation, the banks are being permitted to claim losses they never endured, claim ownership of loans they never funded or bought, claim lien foreclosure, evict millions from there homes, take title to property, create blighted cities that once thrived, abandon the property they foreclosed, and all without taking an ounce of responsibility for the effect on investors who advanced all the money, the homeowners who advanced their lives and all the property, the taxpayers who have paid the defaulted loans repeatedly to banks that did not own the loans, and the nation’s prospect as the leader of the free world.
If the net effect is that the homeowner is left with full liability to the real creditor, or that the homeowner pays twice on the same loan, or that the creditors received full or partial payment multiple times from multiple sources, and if that is what is being covered up by Robo-signed documents, then how can we assume that these crimes are victimless? the investors are being cheated out of the repayment of the loans they made because the banks took the money and ran. The homeowners are being foreclosed for a debt that has been repaid out of their tax dollars. the cities and counties and states are being deprived of tax revenue for expenses that in large part were the result of planning for services and infrastructure to accommodate the false real estate boom.
Robo-signing is only victimless if these were “White lies”. Without further investigation and discovery how does anyone know that Robo-signing was not as mean-spirited and pernicious as it sounds when put into solid language — the forged signing of fraudulent documents containing false declarations meant to deceive the reader, the public and the recording offices? Hint: Start with the amount of money that is claimed as defaulted from 2006 to the present and apply payments received from all parties, not just the borrower. And remember that if the payment came from the taxpayers, it came from the borrower who pays taxes just like everyone else. If the money came from insurers or counter parties to credit default swaps, and…investors who advanced the money…are satisfied, why should the borrower pay it again? — especially to banks that were never more than conduits, never had any loss, never funded the loan and never purchased the loan.

This entire mortgage debacle fails the common sense test. When the savings and loan industry swindles of the 80’s occurred, memory serves to confirm that their was still accountability in our system.
What many do not understand or fail to acknowledge is that the entire system has collapsed into avarice, fraud and misrepresentation. When a person who has worked his/her entire adult life buys a home to live in, this represents (or did) investment in the concepts of community, stewardship and progress.

What has emerged from the sewer of MBS and CDO shenanigans is the ruin of 200 years of property law and practice, a shell shocked citizenry holed up in underwater homes among the craters of their bankrupt communities, where basic services and safety can no longer be assured. As the cities and counties curl up and die, due in large part to the criminal syndicates behind MERS, who abandoned the communities and the rows of homes they hold in shadow inventory, off the books, in some ENRON inspired accounting blackhole. This is the real America, where the sheriff may arrive any moment to throw tou out on the street, the only thing on your side is the backlog of seizures and the lack of funding has slowed the foreclosure railroad down just a bit. Meanwhile, the servile corporate journalists belly up to the PR buffet for the latest handouts of newer more improved schemes to immunize the cancerous greedy bastards so they can sell your homes to their co-conspirators on the cheap, and rent them back to you -HEADLINES- GOOD NEWS! you may not even have to move, isn’t that convenient? Big win for the consumers!

David, I’ve been dancing around that same issue, myself. I don’t care that your home is worth less than you paid. Boo hoo, basically.

And to me, the focus (on the government side) shows exactly what this is all about: If they’re focusing on underwater homes, they don’t care about fraud. What they care about is making sure the real estate market doesn’t go down. They care about making housing harder to afford.

One minor correction, though: One way you can no longer afford a mortgage is if you were coerced into any of the “balloon” kind of programs. My mother was offered a mortgage where she would “only” need to pay interest for seven years, and it was sold that way.

I finally convinced her to avoid it. But the actual “deal” was that, at the end of seven years (when they told you it’d be easy to sell at a profit), you’d pay interest, principal, and back-interest on unpaid principal for seven years. In other words, a 2005 mortgage could be expected to nearly triple sometime this year. I don’t know anyone who could afford a change like that.

And by the way, she wasn’t looking for a mortgage. A banker found her, harassed her until they convinced her to shop around for a house, and found her a real estate agent, all to pitch the offer and pressure her to sign. So the people who’ve actually been wronged, I sympathize, and (back to David’s point) can’t understand the attention to having made a poor financial investment by buying high.

Our home was Foreclosed and sold using famous robo signer
Erica A. Johnson Seck on a Substitution of Trustee document. Another document used to foreclose on our Home was an Assignment of Deed Of Trust signed by robo signer Brian Burnett.
Who will be accountable for these fraudulent practices comitted by banks and who is allowing it to continue?

There was a major brou-ha-ha, particularly by the Attorney General of California that she would not approve any settlement unless the individual’s right to sue was preserved. Apparently she caved in. Marie, you may have lost that right for the prospect of receiving a nominal stipend. I’ve heard nothing about this other than they are all
slapping each other on the back for a job well done.

To HCS after our home was sold at a foreclosure auction I contacted the Ca State Attorney General due to the fact that we had a Hamp loan mod which was declined due to it not being notarized but it was notarized and we have proof. The ATG office contacted our servicer who then contacted us who then told us the bank errored regarding our case we then filed a wrongful foreclosure lawsuit which we could not continue due to a new precedent stating that a loan modification is not valid unless signed by the lender even though we made 2 payments which were accepted. So, the banks can also get away with breech of contract, no surprise. We sent in an application for an Internal Foreclosure Review so we will see. I believe it is important for the general public to be aware of the truth and what is really happening regarding Mortgage Fraud.
To Jeanine, the only way we were able to stop the sale of our home was to file a Bk13. Do research to assess if this is right for you. Good Luck.

Marie, sounds like you have been 100% diligent in trying to save your home. Quite simply, it shows how little control we have over our lives.
However, as I have indicated before, everyone has to assume some of the responsibility. The issue is how much and when. Let’s face it, the
banks would not have entered into this settlement if the entire fault were the homeowner. As thorough as you appear to be, check the two
major law suits vs. B of A resulting from their “acquisition” of WAMU.
I look at it differently than most people in that I don’t think they are too big to fail. Unfortunately that probably won’t help you. My Best!

After 3.5 years of being involved in this process of trying to fix the problems with a national foreclosure prevention program, that would work, the possible success of this settlement is no different than HAMP.

The settlement fails to get to the basic problems inherent in the approach taken 3 years ago;
1) that the banks will do the right thing.
2) the servicer will hire the right people.
3) the servicer will invest in the technology
4) the servicer will follow the guidelines correctly
5) GSE involvement
6) the banks are afraid of the government or the law (lol)
7) the Congress has the will - in and election year

Some one asked in an earlier post if “they” (banks/government) think we are ignorant - in my opinion the answer is yes, the over whelming majority of Americans, if you asked, would have no idea what HAMP, the AG Settlement or the OCC Consent Order even is. “They” know the media - including Fox has not held them responsible for the past three years, no one has gone to jail and very few are under investigation, why would “they” think they are at risk from the American people.

The reason it is $2,000 for someone that lost their home is because Obama already lost that vote - but random principle reduction appeals to the voters that are in trouble or not - Obama to the rescue. Yes they do think we are ignorant. There is a very large number of people out there who are underwater (1 out of 4) what a great way to get votes than to insinuate the Administration has forced the banks to readjust loans to current market value.

The biggest joke of this whole thing is the GSE, who own 50% of all loans are not involved. So I guess the other 50% of the market will correct real estate values. I am a supporter of principle reduction but our plan only allowed it to be used in a modification and only to a maximum of 15% to get to the 31% front end DTI using the HAMP waterfall approach. Lowering a troubled homeowners rate to 2%, extending the term to 40 yrs and reducing the principle (UPB) down 15% would lower someones mortgage payment by up to 40%. If they can not afford that than - I’m sorry but they can not afford the home.

To adjust a loan to current market value in an area will only give the receiver of the reduction the ability to sell they home for that much less a few years from now. If two homes in the same area had a $300k mortgage but one got a 30% ($90k) reduction to reflect current market values how does that help stabilize or improve the housing market long term - it doesn’t. Bad policy for political gain.

Maybe Paul can answer this but how does the Settlement tie into the OCC Consent Order? If a homeowner was foreclosed on in 2009 or 2010 - by accepting the $2,000 do they sign away their right to OCC Foreclosure Review and any possible financial recovery? I have a feeling that the reason the banks agreed to the settlement is so they can use the $2,000 number with the OCC after their Review shows the homeowner was financially harmed. I guess time will answer that question.

So here we are three years later with the AG Settlement with one policy and the OCC with a different policy an Treasury still in the dark. What a strategy to save the American Dream - what a country.

Can anyone explain why American Home Mortgage Servicing Inc. (AHMSI) or any other lenders of the like are not in part with these settlements? AHMSI is already not a part of the OCC Foreclosure Review because they are not a National Association Bank monitored by the OCC. Is this focus on the top five bank servicers a popularity contest or am I missing something.

“One minor correction, though: One way you can no longer afford a mortgage is if you were coerced into any of the “balloon” kind of programs. My mother was offered a mortgage where she would “only” need to pay interest for seven years, and it was sold that way.”

In my reply, I didn’t try and cover all the ways that you can find yourself unable to meet a mortgage, so I focused on loosing jobs. In the end, none of these are the same as having your house “underwater” and there is no indication that there is much attempt to consider that issue.

To those who think we, the victims of bank fraud, and that’s just what it is, fraud, are getting a ‘free ride,’ well listen up: I signed a mortgage loan with a co-borrower, based on our combined income, we got a good interest rate and affordable mort. payment. What happened to us was totally beyond our control. I lost my job to illness, and went on disability, which I paid into for the previous 34 yrs. My partner lost his job (insurance) due to downsizing/economy, etc. We struggled to pay the mort. but just couldn’t. Lost our savings, then HAMP looked promising. But every single person at Bank of America was so incredibly incompetent. We sent documents four, five times. They were lost. We were advised totally different things by BofA. We followed every rule. We were approved then denied, then approved then denied. The bank did not know WTF they were/are doing. Our house was incorrectly put in foreclosure. Then taken out. Bank of America called me not less than five times per day, six days per week for a year. I am NOT exaggerating. I know I’m not alone. So if you think I did all this for a free ride, then just think that. I know the truth. And by the way, I saved every single letter and document from the bank, hoping I will be part of a class action lawsuit before I die.

The mass awakening, otherwise known as the Occupy Wall Street movement, is giving me tremendous hope. The movement correctly points to excess corporate power as a source of injustice and economic inequality. They also wisely prescribe moving of our money from huge international banks to local credit unions.

It is no less true now than when King Solomon first wrote Proverb 22:7, “Just as the rich rule the poor, the borrower is slave to the lender.” The modern mechanism of rule now includes corporations and the ancient practice of money creation. The Occupy Wall Street movement addresses both. But do they go far enough? No other time in history is mere survival as dependant on money, which inevitably buys necessities made by corporations.

It is instructive to note that both Nehemiah in rebuilding Jerusalem and Solon in ushering in the Golden Age of Athens responded to mass misery and economic injustice by cancelling all debt. This idea is not too radical. Even Chancellor Merkel from the largest creditor nation in the Euro zone is “asking” private banks to write off debt to help stabilize the world economy. The Occupy Wall Street movement could “demand” for an even stronger move. We might as well think big.

I don’t know about you but the words rebuilding, Golden Age, and Jubilee have a far better ring than decline, collapse, and dare I say, apocalypse. We are the leaders we’ve been waiting for.

I for one was happy to see the Occupy Wall Street start but unfortunately the message did not get out or was lost in the media coverage. If all the people that occupied wall street had a singular message that they all lost or where in the process of losing their homes - and that message was relied to the public by the media I think there would have been greater support from the general public. But that did not happen - the message that I heard through the media was one of general discontent with capitalism and free markets.

The foreclosure crisis and the fraud committed by the banks would have been heard nightly on the news by people sitting in their home. Slogans like crony capitalism, does not resonate with the general public however if everyone interview on camera when asked why they are sleeping in the park answered with “the bank took my home” - there would have been support.

Asking the banks to forgive all debt is unrealistic and only hurts the millions of regular people with there retirement money invested in Wall St. Just imagine what most Americans would say if they heard stories like some of the posts here day after day. Just think of all the politicians that would of have to get on board due to public pressure. If action was taken 2 years ago it would not have taken the Obama Adm 3 years to address the subject again.

The banks pity the home owners with $2000 thats a damn shame ,The banks commit the crime & they get to determine the penalties .this is nothing more than hush money & nothing will change HAMP is a huge failure & so will this settlement.The homeowners will be screwed all over again ,& no one gives a damn.

I finally received my modification. It only took 18 months. I too was denied and approved several times. Bank of America listed errors on my application, listed me for foreclosure, had me behind for 6 months…I wasn’t. During this process here’s what I learned:
1. Keep abreast of your account status. I called every 3 Weeks, wrote down who, what and when.
2. Don’t stop paying your mortgage…of you can. Try to pay something. Many people deliberately stopped paying even when they could then thought they would be bailed out. Servicers are more reluctant to modify high risk homeowners.
3. Challenge everything they say. Don’t let them sell you a bunch of crap.
4. Keep track of all documents.
5. DON’T GIVE UP! That’s what they want you to do!

My mod came just after President Obama called out Bank of America on TV as one of the banks with a high mod denial rate.
My interest only loan went from $1800 to -$1020 principal, interest and property tax.

My great goes out to all of us under the threat of losing our homes. May God bless us all.

It is a bought-and-paid-for “Get Out of Jail Free” card for the banksters.

First the banksters invented and pushed toxic mortgage programs that were destined, if not designed, to fail: interest only, negative amortization, no tax and insurance escrows, no qualifying, and teaser low beginning interest rates - all backed by a wink and a nod: “Don’t worry, if it gets tough, we’ll just refinance you into another lower rate.” Unsuspecting borrowers pushed to the bankster/realtor controlled title company had no one to look out for their interest. They believed the sales pitch and signed up. An inherently dangerous product is sold to the public as safe - much like the unsafe-at-any-speed Chevrolet Corvair. Evidence now suggests that a majority of the sub-prime loans were made to people who would have qualified for a decent loan but were pushed into the more-profitable, but toxic, sub-prime.

Second, the banksters packaged this garbage into bonds, paid for a AAA rating, then sold the stinking poo to unsuspecting investors while retaining the lucrative servicing rights for themselves.

Third, the banksters developed a scheme (MERS) that was supposed to keep track of the swirl of paperwork as they whipped these loans and bonds around the world while defrauding local courts of millions of dollars in transfer taxes. Talk about tax evasion!

Lastly, when the whole thing unravels, the banksters have lost the paperwork, don’t know who owns what, can’t understand how it all went so wrong and won’t negotiate to help people keep their homes.

I have no sympathy for the banksters and this settlement is just another example of crony capitalism.

I’m with Janet A. We too were forced into robo foreclosure in Michigan after loosing a job in 2008. I forced Chase to accept a short sale in which they did only because the new owner was financed by Chase. Yet I have been harassed for the past 4 years by chase for the HELOC repayment when they accepted a settlement. (150k is now about 200k). Now threatening to sue me. I would have never sold if I could have stayed in my house for the last 4 years saving money & try to qualify for a mod. Where’s the the help for us who did the right things !

Those that believe government intervention in the markets can somehow forstall, delay, or stop the inevtible bottoming process in housing need to look at Texas and the 1980s and the collapse in their housing markets coincident with the collapse in oil prices.

When it hit bottom, it hit bottom. No government can do anything but delay the inevtable need for millions of homeowners that cannot make their payments to move on and start over.

As for the notion that these government interventions do not cost the taxpayer. Well, Wells Fargo Bank and Nevada State Bank contacted my wife to inform her that checking accounts for herself and her mom will have $8/month charges beginning in March. Both had accounts free of charges for over ten years.

Bank of America cut rewards on my VISA in 1/2.

Once again, irresponsible behavior by homowners who borrowed too much translates into others being forced to pay up for their misdeeds. Oh I suppose if it isn’t a direct government tax hike then there is no cost to taxpayers…........... NOT TRUE!

On the monthly bank charge fee. They can only charge if the consumer agrees to stay and put up with that. SunTrust proposed the same thing and the backlash from internet consumers was too great and they recanted that absurd decision to charge. What a drain on the economy that would have been. Tell Wells Fargo to KYA and go elsewhere!

Actually, the surprise was Nevada State Bank which had a great rep for being balanced with their customers in terms of checking. My mother-in-law’s account was supposed to NEVER have charges because she was over 70 when she opened it up. Then, they said, NEVER…. but have obviously changed their minds because they can.

In an era where many of us set up auto-withdrawals from our checking accounts instead of using billpay which I always assumed would become a fee-based service…. easier said than done just to pick up and move on…. and the banks count on that…. Wells Fargo Bank is no surprise since I believe they have a fee for entering a branch and taking a breath.

The bigger point is more and more SMALLER banks are imposing new charges so that responsible savers can subsidize the irresponsible borrowers.

Who will really pay? Some say the investers are the real losers, as the banks have charged them with all expenses, including legal ones to manage the funds they sold them. When will the bilked investers start screaming and demanding an accounting from the banks? When will they start suing?

In a basket of snakes, no one stands tall. As this society has quietly but steadily boiled in the toxic stew of “liberty and Justice for some” - I must point to the Milkenization of US businesses as a contributing factor.

Our moral, ethical and humanistic aspirations have slowly slithered into a cruel robo-signing, wiretapping, fracking rendition of this American life, where the consumer is the food thrown into the basket to feed the greedy snakes.

When the mice are told ‘we can’t afford healthcare,’ and our basic universal human rights are bulldozed in sacrifice of some synthetic instrument to enrich parasitic resource reptiles- this country has truly lost its center.

The fact that our government, our duly elected “representatives” would allow one - American citizen to be illegally or immorally dispossessed of his home, denied due process, and turned out in the street without every resource at the government’s disposal is not just criminal, it’s destroying our societal obligation to each other.

Remember, the beginning of the German holocaust started with the government’s dispossession of a large segment of the citizenry.

Wake up! Stand up for your rights! If Americans stand by and tacitly allow our fellow Americans to be punked out of our homes, make no mistake, you and I are next,

Perhaps as part of our outrage at the capture of our society by the 1%- the suborning and perjury committed under color of court- we should all Occupy our Debt. Stop paying our mortgages and credit cards - use cash. Financial strike for Justice!

This stinky back room deal is not completed. Peaceful civil disobedience is a time honored and ultimately effective way to restore justice and economic fairness- particularly when the debate only serves to paralyze the prey.

In truth and in fact the government knows what happened. The documents and evidence have been collected. In October of 2007, the FBI financial Fraud Group Task Force seized offices of Countrywide Financial. They turned the computers over to the Department of Justice, they interrogated the loan officers and management.

Enforce the law. The continuing collusion threatens the foundation of our republic. All it takes is that a few million of us become victims of the latest swindle to further damage the principles we have fought and died for-

Strike a blow for freedom, from tyranny and usury and the corruption of predatory practices that have bankrupted our communities, stolen our equity, and pulled up the drawbridge on the American Dream.

Have we so finally lost our moral compass that we tacitly condone these swindles?

This is not a fantasy, not some crackpot rant - the coordinated, well organized suite of attacks on government, workers, students is no accident. The forces of predatory plunder are winning the fight, and hollowing out our country like termites.

It is no crime to act in self-defense when attacked. The reductions in services in opportunity, the denial of justice is a violent assault on each and all of us.

It’s time to wield the only tools we have when Fighting the economic criminals - stop showing your neck- stop rolling over, stop letting the vampires keep your kids out of schools. What do we do in solidarity with our brothers and sisters, fathers and grandmothers when the richest 1% stop being citizens, and feast on our goodwill and economic fatigue.

I am an accountant who lost > 84% of my tax practice due to foreclosures/short sales/abandonments. 16 moths later I filed for bankruptcy. I have done >117 tax returns with cancellation of Debt (what happens with foreclosure, loan mods, cr card reduction, short sale, abandonment). People do not realize the amounts decreased in a loan mod, etc. above are TAXABLE INCOME the net year. Unless you file a ChVII bankruptcy this is not dismissed in bankruptcy. The Tax Laws are complex and arcane, I have taken > 92 units of COD taxation CPE in the last 18 months and I barely understand it.The tax accountants only want to work for rich people and think anyone who loses their home or declares BR is a low-life. How did I know? I have been an accountant doing individual and corporate taxes since 1982.
I have decided to teach COD taxes to the public through NPOS, and to ordniary tax practitioners.
This crisis has decimated my life, but because I was a finance professional, with 28 years of tax training I was able to keep my house and have no Tax Liability. I wish I could help those who as yet unaware that losing their house is just the beginning of the hurt.
I read the Bill and of course, the COD on ReFis is NOT going to be forgiven, and this feeeble program shows that our Congress is only beholden to the Banks and the Lobbysist. Shame!

As far as robosigning there have been zero lawsuits by homeowners because the immediate countersuit would be for payments not made by the homeowner.

Supposed dispossessed homeowners were living rent free and had a chance to save money while banks sat on their rears before finally foreclosing.

Lost in all this is the fraud commited by home purchasers who overstated their income and assets. Most experts believe as much as 40% of dispossessed homeowners committed one form of fraud or another in order to buy more home than they could ever afford based upon a real economic mortgage anyway.

The lenders have done wrong but buyers did just as much or more wrong. Everyone chooses to forget it just isn’t the top 5 banks that got us into trouble. Hundreds of smaller banks allowed their customers to lie and cheat their way into a home and never made any effort to sell off their toxic mortgages.

I wonder if the truth will ever come out with regard to the fraud of the home purchasers. Probably not because it does not fit within the democratic party narrative regarding evil rich bankers.

@Bruce F: Easy to say “I wonder if the truth will ever come out with regard to the fraud of the home purchasers. Probably not because it does not fit within the democratic party narrative regarding evil rich bankers.”

But you know what makes your statements….your constant condemnation of the American people and your support of the “evil rich bankers” over both the American people and the rule of law ring false?

Simple: If the “evil rich bankers” could find a fall guy other than themselves, they’d be all over it…if it were in fact possible for the “evil rich bankers” to blame “fraud of the homeowners”, you know they would have been and would still be all over it.

They did, after all, have a hundred million or a billion dollars here and there that they could have spent to make that point…and a ready, willing, and eager political party - the Republicans - that has as much antipathy for the American people as you do at their beck and call. Not to mention the WSJ, Fox News, Limbaugh…the whole propaganda machine of the right which likewise constantly displays a slobbering eagerness to hang the American people at the least little excuse….

I think you better check your facts. Obama received his biggest money from Goldman Sachs, Morgan Stanley, JPMorgan….. and most of the other major financial institutions in this country.

Excusing the little person for being too stupid to look out for themselves is at best a sad commentary on just how ignorant the vast majority of borrowers who thought they could take out 1% teaser loans barely being able to cover the payment and not a single moment was spent wondering how they would meet their payments when the interest rate rose to the market rate.

Keep excusing people from assuming personal responsibility and keep blaming the regional and smaller banks who hold the vast majority of bad loans right now and are in far worse shape than the politicians are reporting because they were unable to unload their loans to the CDO and other blind pools wall street gathered together.

I have never excused the big banks. Most of their practices do call into question whether they are banks or corrupt organizations that should be proscecuted under RICO statutes.

But in the end it is all the little people that did not look out for themselves, diluded themselves that ran this economy to the brink.

Let’s encourage financially less greedy individuals like Mr. Barack Obama to take control of guys like Donald Triump and their Associates that are major role players in industries such as mortgage, insurance etc.
Unscrupulously earned too much wealth should be taken away from these guys by honest application of a set of new tax rules and financial regulations for facilitating a new system of redistribution of wealth; knowing the fact that capitalism will always get back to its normal course and status quo after a while. Also, knowing the fact that time to time balancing would be required in order for maintaining healthy financial, political and social atmosphere on any developed piece of land, for example: our great North-America.

Well, Bruce F., were I a slightly crueler person I would expand your insistence that all Americans are to have the in-depth knowledge of housing, the housing market, the financial market, the loan origination market, the regulatory structure, and the interplay between “high finance” and their pets in Congress that would be required to protect them from from the corrupt in those sectors and make a little prayer that you run upon a doctor who feels as you do…who feels that all people should be experts in his and all related medical and regulatory fields and so should know better than to take or do what he prescribes.

The small and regional banks may have troubled loans, too…but they should benefit from the “Move Your Money!” movement as more and more Americans realize that the big banks - along with Wall Street - represent all that is wrong with America. It is the big banks and Wall Street - the people behind them, that is - that are the reservoirs of the attitude that the American people are nothing but “little people that [do] not look out for themselves” and so they are the natural prey of “high finance” in America.

And making fun of Americans who took ARM mortgages? Not nice…for prior to the full impact of Republican policies like forced oil addiction, “flood-up/trickle-down” economics, deregulation, and inequitable free trade an American could expect job security and expect that his or her income would reflect pay raises that reflected their hard work and growing experiences.

Thus the loan origination officers spoke when they pushed “bubble” mortgages off on the unwitting…and it was a reasonable expectation, to, for economic mobility had been a feature of the American Dream for almost three-quarters of a century.

But Reagan…the Republicans….Clinton…the neoliberal Democrats…they worked together to create the aforementioned polices that made the expectation of job security and economic mobility - pay raises - obsolete. It wasn’t the American people - the little people - who made the mortgage crisis; it was their leaders…it was forced upon America from the top, down. It took Big Bankers, Wall Street, and Republicans and neoliberal Democrats working together to murder the American Dream.

You are missing the whole point. Home buyers did not have homes brought to them by bankers. They made their own choices and in way too many instances bought too much home based upon these ultra low teaser rate ARMs.

It was up to the individual buyer to figure out what the impact of market rate interest would be on their monthly payments. Yeah lenders were pushing these loans but I submt the elegant simplicity that had the vast majority of home buyers had bought homes based upon the payment these homeowners should have anticipated…... using the teaser rate to their advantage as long as there was no negative amortization… we would not be in the mess we are in.

Late night TV real estate shows were teaching middle class home buyers how to stagger multiple escrow closes so banks could never figure out how much debt they were taking on…. reassuring these people that the solution was to sell one or two of the homes for big profits to pay down the third home loan (in the case of a three escrow close scenerio).

Other late night real estate gurus encouraged you to buy a home way beyond your means using an ARM and then sell that home, take the profit and rollover into a home you could afford…. after all, real estate never goes down in value.

Re: Politics:

The reality is that both parties are fully aware that in order for the world economies to create great middle classes the American middle class has to be knocked off its block. Both parties have tried to compensate the middle class for their losses by offering more and more government largess…. largely unpaid for by taxpayers in this era. Neither party wants to respond to the challenges of a fading middle class because of the enormous costs to re-educate this population and more importantly to restructure an education system ill-equiped to train an entire generation for jobs of the future.

On that same track there are 1M or so construction workers that continue to wait in union halls or at home for construction jobs in an economy that will not recover in terms of the construction part of our economy for many years.

Both political parties are in the business of growing government constituencies. Big Business just laughs all the way to the bank and the multi-trillion dollars in bank deposits that will remain frozen because big business has no interest in growing in the US which is a market where consumerism has peaked and will begin falling in real terms as more baby boomers (retiring at a rate of 10K/day) retire.

US better get used to much lower rates of economic growth, job growth, etc. Last week, it was announced that Italy grows at an average annual rate of 0.27%. That is where we are heading as a greater share of spending is from government transfer programs and our youth falls into a malaize, realizing they cannot get ahead until their parents die and leave them an inheritance.

No, Bruce F., you’re missing the point. Those ARMs made perfect sense under the old paradigm - the paradigm that exemplified the lives of “the greatest generation” as well as much of the “baby boomer” generation.

That paradigm had it that all you had to do was get some education and/or experience, work hard, and keep trying to make yourself more valuable and you’d have job security and pay raises commensurate with the effort you put forth. And that paradigm worked…and America worked…and housing in America worked.

But then the Republicans and neoliberal Democrats destroyed the old paradigm with:

Under the old paradigm - which both encouraged and rewarded the famous American “work ethic” - you could safely assume an ARM and work yourself up income-wise before “the bubble” came. Loan originators stressed that; millions of Americans looked to the example set by their own parents and naturally thought “If they could, I sure can!”...and signed off on what their oh-so-friendly “expert” claimed was the best deal in town.

But the 1% had been busy, busy, busy…stacking the deck against the American people…not least of all with the Republican enforcement of oil addiction which enabled the levying of private taxes through speculating in oil (or have you forgotten the tremendous run-up in energy prices 2006-2008 that served as the push that toppled the mortgage house of cards?).

The American people didn’t know it - didn’t recognize the signs, as so few of us did - but the old paradigm had been destroyed.

Now the American people know that there is no such thing as job security…now the American people know that there is no basis for assuming that you will be rewarded for hard work. Now they know that buying a house is foolish, for there is no sanity in assuming that your job will be secure long enough to pay off a 30-year mortgage - ARM, or not. Now they know that all investment in purchasing a home - all of the mortgage payments they made on time for years…perhaps decades - will simply be lost when some greedy CEO offshores their job or pursues a merger and eliminates them as part of a “consolidation of effort”. Now they know that they cannot assume any degree of “normalcy” in the price of energy; now they know that Big Oil and the speculators can again - whenever they want - force them into a choice: Buy the gasoline required to commute to work to earn the money to pay the mortgage, or pay the mortgage.

Now the American people know that the Bush Administration’s launching of the mortgage-backed securities pyramid scam

and to conceal the damage being done by inequitable free trade…you see, an artificial housing bubble was a swift and easy way to drive the economy while enriching the right people (who are ever the right’s people). Now the American people know that the Republicans and neoliberal Democrats betrayed them and murdered “the American Dream” only as preparation for destroying “the American way”...

But the American people didn’t know it before the housing market crashed. Before, they were playing under the rule set the Republicans now hold up as “American values” without understanding that the Republicans were betraying them. To blame the American people for having faith in their leaders when that faith had been warranted from FDR up until (discounting the blip of Nixon) Reagan…to blame them for not discerning that they were, in fact, being betrayed…

Well riddle me this: Is it fair to blame hundreds of American travelers for boarding aircraft without even thinking about the possibility that the aircraft would shortly be flown into the World Trade Center? After all, those passengers had been perfectly safe over the hundreds of millions of frequent flyer miles they had collectively flown…how could they know that the paradigm of flying safety had been altered behind their backs?

It is no more appropriate to blame the American homeowners who were likewise betrayed by their leaders, their lenders, and “high finance” - big banking and Wall Street.

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